Facebook’s $19bn acquisition of WhatsApp this week does much more than measure the breadth of Mark Zuckerberg’s spending power and his company’s ambition.
It should highlight how important one of the most basic forms of digital communication – messaging – is to the internet’s future.
Here’s the first thing about all of this you should know: while US companies obviously have significant purchasing power, American startups are in some ways behind the global curve; much of the innovation is happening thousands of miles away from Menlo Park. And here’s the second thing: WhatsApp’s competitors make its current revenue model look really, really sluggish.
Messaging is enticing for a few reasons. For one, it’s a medium used by people all over the world. For another, it’s quieter; messages deliver a stream of photos, video or simple text direct from loved ones, without the added noise of everyone else on the internet. Messages provide for the fastest way for people to connect or find each other in a crowd. And messages allow people to buy stuff – lots and lots of stuff – in an almost criminally seamless manner.
Consider the following a 101 guide to some of the messaging apps you may not have heard about, including a brief refresher on WhatsApp. These apps provide services that WhatsApp/Facebook may hope to emulate in the race to make money and literally monopolize the world’s attention. (And if that sounds creepy, that’s because it sort of is. The Guardian’s Dan Gilmor takes a look at a world where Zuckerberg, not phone service providers, dominate communication.)
App: WhatsAppShort attention span version: Born and bred in Silicon Valley by two ex-Yahoo employees, this app registers one million new users per day, and 450m users per month use the service to send text, photo and video. And now it’s worth a lot of money.#
Where it’s popular: Europe – up to 80% market penetration in countries including Brazil, Germany, Portugal and Spain – and Latin America, India
Numbers: $19bm is the only number anyone’s paying attention to at the moment
Why it’s worth watching: See above. Also, WhatsApp’s revenue strategy ($1 after a year of free use) looks especially sluggish compared to other apps offering similar services.
More reading: Dominic Rushe’s breaking story on the acquisition also has great background on founders’ visions for the tool – and more numbers, if you need them.
Short attention span version: Line was developed in Japan after phone communication failed due to the 2011 tsunami. Users can use text, photo, video and sticker emoticons to chat. Users can also buy things, and brands can buy stickers that users can send to each other for free.
Where it’s popular: Japan, Thailand, Spain
Numbers: Approximately 300m users, only 50m of them in Japan
Why it’s worth watching: Line has made money selling sticker emoticons and games – not far from the types of diversions you’d find on Facebook. This month, experiments with “flash sales” in Thailand resulted in 5.5m out of the country’s 22m total Line users signing up to buy discounted food and cosmetics.
These were technically ads, but clearly not invasive enough that make people bristle. This could be a hugely instructive move for WhatsApp. And, oh yeah, Line is said to be considering an overseas IPO this year, which analysts say could put the value of the company around $10bn.
More reading: Ben Thompson has an excellent deep dive into Line’s flash sales and stickers strategy at Stratechery.
Short attention span version: Developed in China (the world’s largest telecommunications market), WeChat is owned by Tencent, an internet service provider that has monopolized the market and set sights on the west.
Where it’s popular: South-east Asia, South Africa, Russia, India
Numbers: Approximately 300m users; expected to earn $1.1bn next year
Why it’s worth watching: Much like Line, WeChat has already figured out how to entice users into linking the service to their bank accounts for purchases, which include buying new smartphones, through special promotions. It’ll also be interesting to see if WeChat can crack western markets by, in the words of the Economist, persuading “consumers living in free societies to use a social network actively monitored by an authoritarian regime”.
More reading: Quartz has a nice explainer on WeChat’s ability to retain users and keep them within the app.
Short attention span version: Operating out of Cyprus, this one’s pretty much like the others, but with more of an emphasis on the kind of messaging you do with your actual voice. In the olden days we used to call this “phone calls” or “Skyping”. Viber was purchased for relative peanuts ($900m) last week by Japanese comms giant Rakuten.
Where it’s popular: It’s used in 193 countries – everywhere?
Numbers: Reportedly losing money to the tune of $29.5m last year, but has approximately 300m users.
Why it’s worth watching: Much like Facebook, Rakuten is seeking to expand its empire by broadening its profile of services. But Rakuten an online retail company (think Amazon status), so it’ll be interesting to see what it does with Viber’s wide user reach and a sticker-based communication model similar to Line’s
More reading: Variety has drawn some nice comparisons to the WhatsApp deal here
App: Kik messenger
Short attention span version: Created at the University of Waterloo, this messenger just launched an in-app web browser. And teens love the tool, one of several signals that the next generation will be more into direct messaging than millennials. It has yielded many a “parents beware” blog post.
Where it’s popular: The US and Canada
Numbers: Approximately 100m users; raised $19.5m worth of funding in 2013
Why it’s worth watching: Kik is making a big push to retain users inside the app for much of their web browsing and social sharing experience.
More reading: Props to TechCrunch for asking Kik CEO Ted Livingston if Facebook’s WhatsApp acquisition had resulted in any similar offers for Kik – reporter Darrell Etherington got a non-response.
Suffice it to say, the race to conquer messaging is on, in every time zone, all over the world. Adjust your thinking accordingly – the Snapchat/Instagram/Twitter DM shuffle of last year was relatively quiet compared to this. If you’re still searching for apps, Samuel Gibbs has a good rundown of everything that’s left, including Snapchat and Facebook’s actual messenger app. (It’s called Messenger.)
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